Challenging unilateral brand spillover effects in sponsorship portfolios

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Presented at the 2010 Academy of Marketing Science annual conference: Commonly sponsored enterprises such as sports teams, traveling shows, celebrities, charitable causes, museums, and festivals have built their own valuable brands that carry considerable equity in the marketplace. Yet, it is unclear if and how a sponsored enterprise’s brand is affected by the corporate brands that align with it. The results of this study demonstrate that the brand quality of a sponsored sports league is partially dependent on the brand quality of the league’s portfolio of sponsors.
  • 1. Mark D. Groza University of Massachusetts –Amherst Joe Cobbs Northern Kentucky University A Portfolio Approach to Sponsorship Alliances: ChallengingA Portfolio Approach to Sponsorship Alliances: Challenging Unilateral Brand Spillover EffectsUnilateral Brand Spillover Effects
  • 2. Presentation Outline Research Motivation Theoretical Background and Hypotheses Survey design and empirical results Discussion and Implications
  • 3. Research Motivation “Earlier this year, BP signed on as a major USOC sponsor, saying the Olympic movement's commitment to environmental issues gave it a perfect platform to promote its own green initiatives. …. The deal puts the USOC in an awkward situation -- partners with a company involved in an environmental disaster on U.S. shores -- though CEO Scott Blackmun said Monday he sees no indication that the sponsorship could be in jeopardy.” --, May, 3, 2010 Feb. 15, 2010
  • 4. Commercial Sponsorship “Provision of assistance either financial or in kind to an activity by a commercial organization for the purpose of achieving commercial objectives” – Meenaghan, 1983 Top objectives: Build brand equity (Cliffe & Motion, 2005; Thjømøe et al., 2002); Goodwill (Meenaghan, 2001) Sponsoring firm/brand Popular [sports] enterprise $ VIK Benefits
  • 5. Sports Brand ValuesSports Brand Values* (Forbes Magazine, 2010) 1. New York Yankees $328M 2. Manchester United $285M 3. Real Madrid $240M 4. Dallas Cowboys $208M 5. Barcelona $180M 6. Bayern Munich $178M 7. Arsenal $176M 8. Boston Red Sox $163M 9. New York Mets $158M 10. New England Patriots $156M *Revenues from sponsorships, naming rights, local media, tickets and merchandise that are not attributable to market demographics and league.
  • 6. Brand Spillover Effects H1) Consumer perceptions of a sponsored enterprise’s brand quality will be positively associated with the brand quality perceptions of the firms within the sponsored enterprise’s sponsorship portfolio. Dimensions of Brand Equity •Loyalty •Associations •Awareness •QUALITY Aaker (1991)
  • 7. Involvement Elaboration Likelihood Model -- when evaluating advertisements relevant to ones consumption interests people pay closer attention -- Petty and Cacioppo 1981; Petty, Cacioppo, and Schumann 1983 Involvement in the sponsorship domain —Gwinner and Swanson 2003 H2) A consumer’s involvement in the sponsored enterprise’s domain will positively moderate the relationship between the perceived brand quality of the sponsors within a portfolio and the perceived brand quality of the sponsored enterprise.
  • 8. Perceived Prestige Social prestige influences consumer evaluations of brand quality (Hellofs and Jacobson 1999) H3) The level of prestige a consumer associates with a sponsored enterprise will be positively related to the perceived brand quality of the sponsored enterprise.
  • 9. Reverse Image Transfer Model Perceived Prestige of Sponsored Enterprise Perceived Brand Quality of Sponsors Involvement in Sponsored Enterprise’s Domain Perceived Brand Quality of Sponsored Enterprise H1 (+) H2 (+) H3 (+)
  • 10. Survey Design Pre Test Ensure stimuli was realistic Ensure measures were reliable Ensure variation in domain involvement amongst subject pool Main Study 171 undergraduate students Created a series of activation advertisements NHL sponsored enterprise Sponsors from 4 product category
  • 11. Four Constructs Brand Quality of Sponsored Enterprise [i.e. NHL] (Yoo et al. 2000) α = 0.93 Brand Quality of Sponsorship Portfolio (Yoo et al. 2000) α(s) > 0.88 Domain Involvement (Gwinner and Swanson 2003) α = 0.95 Perceived Prestige (Mael and Ashforth 1992; Gwinner and Swanson 2003) α = 0.87
  • 12. Hierarchal Regression Analysis Outcome Variable: Brand Quality of Sponsored Enterprise Model 1 2 Step 1 (Constant) 4.502 4.509 Brand Quality of Sponsorship Portfolio .277a .270a Perceived Prestige .570a .582a Domain Involvement .283a .265a Step 2 Portfolio Brand Quality *Domain Involvement .184b F 40.00a 32.61a Adj R-Sq .408 .426 R-Sq Change .018b Note: a = (P<0.01); b =(P<0.05)
  • 13. Discussion Results indicate a relationship between quality perceptions of sponsoring brands and sponsored enterprise (H1)  Corresponds to literature in the brand alliance domain - Samu et al. 1999  Traditional spillover effects in sponsorship limited to asymmetrical conceptions Highly involved individuals are more likely to process quality associations in sponsorship arrangements (H2) - Gwinner and Swanson 2003; Dietz et al. 2009 Quality associations hold after controlling for perceived prestige of sport property (H3)
  • 14. Implications Managers of sponsored enterprises should be concerned with the brand quality of the firms that comprise their sponsorship portfolio Firms acting as corporate sponsors bring more to the negotiating table than just revenue and functional trade resources Contemporary sponsorship is best framed as a bilateral alliance – both partners engage in ongoing co-production of a promotional resource to be collectively leveraged
  • 15. Next Steps Survey sponsorship decision makers Expand context to different domains [i.e. causes, arts, events] Questions?
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